Thursday, July 10, 2008

About this Blog

Will F1 & IRs help Singapore's economy in a spectacular way ?

This is excerpted from Lou.

Don't blame me if you read something you don't like because you bought your property at a high price during the 3rd and 4th quarter last year or say something that shows that you have been totally brain washed by our government like the F1 or IRs will help Singapore's economy in a spectacular way and in turn our property prices will shoot to the moon.

If you wish to hear my p.o.v here's what I think: for F1 in Sept, our gov primary focus is "international branding", if I may put it this way, an appetitizer to our 2 IRs.

Secondly the economic "spillover effect" of which the results will not be immediate and may take years to realize. Do not forget the cost of hosting the F1, the hosting rights for 5-years will cost us US$150 million. Can we generate US$1 billion from F1 per year? Unlikely. US$1 billion in 10 years maybe.

IRs, IR again does not mean 'Immediate Results", why are we building the IRs now and not 15 years ago is quite simply because our tourism industry has already matured and there is little upside potential if Singapore do not rejuvenate it. The fact is that we are losing tourist dollars to competition and we are making an attempt to claw back some of it.

In addition given the backdrop of a possible global US-led recession which will inevitably affect the amount tourist spent here. Give in 6-7 years from now before the positive effects of our IRs will be reflected on our economy.

The creation of 30k-50k jobs from the IR, no problem but peanuts compared to our population increase over the years. It was something like 4.3 million in 2003, 4.6 mil in 2007. Positive impact on property prices, from these 30-50k, no way...substain rental..yes, the same way that it will substain our low unemployment rate.

Postive impact on property prices from the additional 2 million tourists, definately but again not in a dramatic way like $1000 psf becoming $1500psf (usual agent sales pitch).

The IR will work out good and in turn benefit our economy but it has to be given the time to achieve the result, it is one of the component in our government's plan not "THE" component.

Recession - It is an evil word to alot of us, but in fact is just a technical term. Can Singapore avoid recession this year? 100% there will be no recession here. Recession in 2009? 40% chance. 2010? 80>% chance.

Skeptics may think I'm just plucking numbers from the sky, so don't listen to me, listen to the signs:
26-year high inflation rate, US$50 increase per barrel of oil in 6-months, Historic high gold prices, Very weak USD, talks of a deep recession in US. Sounds like a normal day in the market to you?

There is nothing very bullish about it if you ask me.

I think in the end we often live in denial, our government has the tendency to underdeclare how we are really performing even in good times to keep things more evenly balance.

I personally do not see a crash coming in our property market, neither do I see any further upside.

Over extended investors will start offloading their properties from Q4 and into 2009. The occasional bargain can be picked up here and there but probably nothing widespread.

My final view is a 10-15% decrease in property prices from current prices in the next 2 years.

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)